RETHINKING BUSINESS DEVELOPMENT: CUSTOMER INTIMACY TO DRIVE CLIENT LOYALTY & PROFITABLE CLIENT RELATIONSHIPS
Most law firms today face significant headwinds: stagnant demand, demanding clients, increasing competitive pressure from peers, alternatives and substitutes, technological progress changing fundamentally the way legal services are delivered, and a changing work force. The net result for many law firms is that growth is anemic and profitability is under pressure. More in-sourcing by corporate legal departments and growing market share of tech- and process-savvy service providers mean that law firms are competing for a shrinking pot of outsourced legal work.
In response, among other initiatives, law firms have ramped up spending in marketing and business development, even in a cost-cutting environment. A recent study by the Legal Marketing Association (LMA) and Bloomberg Law found that more than two-thirds of firms are increasing their focus on marketing and business development. Most marketing initiatives at law firms are not client-focused. Instead, firms generally market the firm’s internal capabilities and the partners’ accolades and qualifications. Such business development methodologies do not work in today’s market; there’s little to distinguish among the firms, and the conversation with clients usually move quickly to pricing—a race to the bottom.
Firms need to change their approach to business development and account management. To understand how, we need to understand why clients are dissatisfied and less likely to increase spend with law firms without a fundamental change in, among other things, how firms engage clients. How can account management and business development efforts drive “stickiness” or loyalty in the client account, in order to grow incremental business?